Community Affairs:
Article Archive > Missouri

Small Loans, Big Returns
Ways to Work (WtW) is a nonprofit, community development financial institution that helps lower-income people. WtW is designed to help borrowers attain financial independence and advance economically by having money to purchase dependable used cars to get to work or school. Since 1996, WtW has originated nearly 12,000 loans for more than $31 million and the average auto loan amounts to an average $3,400. Results of a 2006 WtW evaluation indicate that borrowers reported an average increase of 41 percent in their take-home pay. In addition, 67 percent of WtW borrowers report that they have used conventional financial services subsequent to receiving their WtW loans.

Headquartered in Milwaukee, WtW makes its loans from 43 offices in 21 states: California, Delaware, Florida, Hawaii, Illinois, Indiana, Louisiana, Maryland, Michigan, Minnesota, Missouri, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Virginia, Washington, and Wisconsin.

WtW offices are located in social service agencies affiliated with the Alliance of Children and Families (ACF). ACF agencies screen and provide financial education to borrowers and service the loans. WtW local offices provide financial education to more than three persons for every individual who receives a loan. Investors in WtW include several national foundations, the Community Development Financial Institution Fund of the U.S. Treasury Department, local United Way offices, and financial institutions. Banks can be involved by investing in the national WtW loan fund, by referring to local WtW offices prospective borrowers who do not meet conventional credit criteria, by participating in local WtW loan committees, and by providing grants and in-kind donations to WtW.

For more information, contact President Jeff Faulkner at (414) 359-1448 ext. 2, e-mail him, or visit his Web site.

[Community Developments Investments, Fall 2008]

Tax Credits to Stabilize and Revitalize Neighborhoods
The St. Louis Equity Fund. (SLEF) was established to stimulate the development of affordable housing units throughout the St. Louis region and Missouri. SLEF accomplishes this through corporate investment using primarily low-income housing tax credits (LIHTC). Since its inception, SLEF has created 22 funds, which have invested in more than 100 projects to revitalize and stabilize housing in primarily low- and moderate-income neighborhoods. SLEF is seeking investors for its newest fund in 2008.

For more information, please contact John F. Kennedy, CFO, at (314) 436-7810 or e-mail him.

[Community Developments Investments, Fall 2008]

The Midwest Assistance Program Loan Fund
The Midwest Assistance Program Loan Fund (MAPLF) is a nonprofit organization that provides predevelopment loans to small rural communities in nine Upper Midwest States - Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming. Loans can be used for clean water and wastewater projects that serve lower-income populations. Borrowers from MAPLF are rural communities and other public water or wastewater authorities with less than 10,000 in population.

Established in 2003, MAPLF has closed seven loans totaling $105,000, has $250,000 more in process, and has sustained no losses. Loans have been made in four of the nine states in MAPLF's service region. MAPLF is an affiliate of the Midwest Assistance Program, which provides engineering, training, and other consulting services to help small rural communities plan and implement water and wastewater improvement projects. MAPLF typically funds projects that have multiple layers of funding, including grants and loans from a variety of sources. Originally capitalized with $100,000 from the Midwest Assistance Program, MAPLF also funds its loans with the proceeds of a federal grant, and is actively seeking new investors. Banks can participate by investing directly into MAPLF, by referring prospective borrowers that do not meet conventional credit criteria, and by structuring MAPLF into financing packages in which the banks would like to participate.

For more information, visit www.map-inc.org or contact Tom Kopp at (952) 758-4334 or tkmap@bevcomm.net.
[Published in News from the Districts, Community Developments Investments, Spring 2006]

Kansas City Revolving Loan Fund Aids Small Businesses
Many small businesses need fixed-asset financing for amounts less than the $120,000 minimum loan amount under SBA's 504 Certified Development Company loan program. The city of Kansas City, Missouri created the Neighborhood Commercial Revolving Loan Fund (NCRLF) to provide fixed-rate loans for less than $150,000 to small businesses in low- and moderate-income neighborhoods needing revitalization. Banks participate in the NCRLF program by providing loans at market rates for terms of up to 10 years to small business borrowers for 50 percent of the purchase price or cost of improvements; NCRLF loans 40 percent of the cost or a maximum of $50,000 for 10 years at a fixed interest rate of 5 percent using a lien position subordinated to the bank's lien position.

For more information, contact Brian Standage of the Economic Development Loan Corporation at (816) 691-2108 or visit www.edckc.com/edcloan.
[Published in News from the Districts, Community Developments, Summer 2005]

Cooperative Financing in the Upper Midwest
Northcountry Cooperative Development Fund (NCDF) is a for-profit, cooperatively owned loan fund that provides financing, training and expertise to small producer, consumer, affordable-housing, worker and land cooperatives in eleven states in the upper Midwest. NCDF today has more than $8 million in assets, has made hundreds of loans to cooperatives since its founding in 1978 and has contained losses since 1978 to 0.27 percent of dollars loaned. Investors in NCDF include banks, cooperatives, religious orders, foundations and others. Certified by the Community Development Financial Institution (CDFI) Fund as a CDFI and as a community development entity, NCDF also has funding from the U.S. Department of Agriculture to help develop and finance rural housing cooperatives, and NCDF last year established a community development credit union that helps members of cooperatives finance their membership shares. Banks are involved with NCDF as co-lenders, as investors and on the board of directors.

For more information, contact Margaret Lund at (612) 331-9103 or at margaret@ncdf.org. NCDF's web site is www.ncdf.org.
[Published in News from the Districts, Community Developments, Summer 2004]

Venture Capital in the Midwest
Venture Capital Fund Hopewell Ventures, L.P. in July 2003 received its "Go Forth" letter from the U.S. Small Business Administration (SBA), a key step toward becoming a Small Business Investment Company. Hopewell, raising up to $150 million of capital, will invest $1 to $5 million in early- to later-stage companies in a dozen Midwestern states -- between Nebraska and Ohio, the Canadian border and Kentucky -- that Hopewell says are underserved by venture capital sources. Banks can invest in Hopewell Ventures as limited partners, can refer companies needing an equity infusion, and can provide banking services to companies in which Hopewell has invested. Hopewell's sister fund, $34 million Adena Ventures, serving Appalachian Ohio and West Virginia, was the first New Markets Venture Capital Company designated by SBA.

Contact: Tom Parkinson at (312) 357-9600; info@hopewellventures.com; www.hopewellventures.com.
[Published in News from the Districts, Community Developments, Winter 2003]

Rural CDC Starts Up in Missouri
Joplin, Missouri serves as the commercial, medical, and cultural hub for the largely rural region that includes southwest Missouri, southeast Kansas, northeast Oklahoma, and northwest Arkansas. Eight local banks have formed the Joplin Capital Corporation (JCC), a for-profit community development corporation to promote economic development in economically underserved areas. JCC will provide "gap" small business loans, from $5,000 to $50,000, for entrepreneurs unable to arrange a complete package of conventional financing. JCC anticipates that a typical loan will finance a portion of a project's needs while leveraging funds from other sources. JCC has identified census tracts in which businesses must operate to be eligible for loans. Businesses receiving a loan from JCC must contribute to the overall economic goal of attracting, retaining, or creating new jobs. Eligible applicants can include existing businesses, start-up businesses, purchasers of an existing business, home-based businesses, or investors in commercial real estate. Interest rates will be based on market rates and priced according to risk.

For more information, contact Bob Stark, Senior Vice President, Hometown Bank, at (417) 782-0005.
[Published in News from the Districts, Community Developments, Spring 2003]

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